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LP Scorecard: Spin-off Leads the Way in Lat Am Performance – CORRECTED

For this week’s scorecard Buyouts takes a look at the 16 Latin America-focused private equity funds within its return database with vintages ranging from 1996 to 2011. Altogether the Buyouts return database includes over 1,500 2007 vintage and older funds from US public pension fund data, including over 500 domestic buyout funds and over 400 domestic venture capital funds. Most of the data is current as of year-end 2011.

The sixteen Latin American-focused buyout funds within the Buyouts return database posted a top-quartile IRR of 15.5 percent, a median IRR of 4.1 percent and bottom-quartile IRR of close to negative 17 percent.

The number one performer in the ranking, DLJ South American Partners, is an affiliate of Credit Suisse Group that plans to spin off as an independent firm once its debut private equity fund has completed its investment period, according to the firm’s Web site. It delivered a 39.6 percent IRR and 2.4x investment multiple.

The new firm has been renamed Victoria Capital Partners. DLJ South American Partners raised $300 million in 2008.

CalPERS is an active investor in Latin America both directly and through its captive funds-of-funds 57 Stars Emerging Markets Fund Investments and EM Alternatives. Colorado Public Employees’ Retirement Association, University of California and UTIMCO have also all committed to Latin American-focused private equity vehicles that feature in this top ten.

In second place on our top-10 scorecard is the 2003 vintage ZN Mexico II, LP which recorded an IRR of 26.9 percent and investment multiple of 3.03x.

Advent International came in third place, posting a 16 percent IRR and 1.5x investment multiple for its 2007 vintage Advent Latin America Private Equity IV-D. The global buyout firm also features in seventh place in this top ten with the 2006 vintage Advent Latin America Private Equity III, which posted a 13.7 percent IRR and 1.6x multiple.

Brazil and Mexico-focused funds take fourth and fifth place with the 2008 vintage Patria Brazilian Private Equity Fund 3 recording a 15.9 percent IRR and 11.2x multiple, and the 2005 vintage Carlyle Mexico Partners recording a 15.4 percent IRR and 1.4x multiple.

According to figures from Thomson Reuters Venture Equity Latin America 2011 Year-end Report, private equity and venture capital investment levels in Latin America in 2011 waned but fundraising and exits remained stronger than ever. Private equity and venture capital investments declined 68 percent, or by $11.7 billion in 2011. Fundraising for the region came to $13 billion last year, a 67 percent growth increase over the prior year. And exit disbursements totalled $8.3 billion, a 5 percent growth increase year-over-year.

To find out more about those delivering the top performing exits see the accompanying ranking.

10. HTMF Latin America

Vintage: 1998

Investor: Colorado Public Employees’ Retirement Association

IRR: -7.32 (as of March 31 2011)

 

9. Westsphere South America PE Growth Fund

Vintage: 1996

Investor: Colorado Public Employees’ Retirement Association

IRR: -6.86 (as of Dec. 31 2011)

 

8. Latin America Capital Partners II

Vintage: 1996

Investor: University of California

Investment Multiple: 0.76x (as of Sept. 30 2011)

IRR: -3.7

 

7. Advent Latin America Private Equity III

Vintage: 2006

Investor: CalPERS

Investment Multiple: 1.6x(as of March 31 /2012)

IRR: 13.7 percent

 

6. Southern Cross Latin America PE Fund III

Vintage: 2007

Investor: 57 Stars EMFI

Investment Multiple: 1.4x (as of March 31 2012)

IRR: 14.1 percent

 

5. Carlyle Mexico Partners

Vintage: 2005

Investor: CalPERS

Investment Multiple: 1.4x (as of March 31 2012)

IRR: 15.4 percent

 

4. Patria Brazilian Private Equity Fund 3

Vintage: 2008

Investor: EM Alternatives

Investment Multiple: 1.2x (as of March 31 2012)

IRR: 15.9 percent

 

3. Advent Latin America Private Equity IV-D

Vintage: 2007

Investor: CalPERS

Investment Multiple: 1.5x (as of March 31 2012)

IRR: 16 percent

 

2. ZN Mexico II, LP

Vintage: 2003

Investor: UTIMCO

Investment Multiple: 3.03x (as of Feb. 29 2012)

IRR: 26.9 percent

 

1.    DLJ South American Partners

Vintage: 2007

Investor: 57 Stars Emerging Markets Fund Investments

Investment Multiple: 2.4x (as of March 31 2012)

IRR: 39.6 percent

 

Correction: Victoria Capital Partners closed its second fund Victoria South American Partners II in March, acccording to Preqin. Buyouts incorrectly reported in paragraph 4 that the next fundraising was imminent.